GLDX: First You Have To Find The Gold

Global X Gold Explorers ETF (GLDX) began trading November 4, 2010 becoming the first gold mining ETF focused on the exploration segment.  “Gold exploration companies offer high risk-return characteristics with the potential to strike a gold mine, literally,” Global X Management's CEO Bruno del Ama said in a press release (pdf).

GLDX is similar to a venture capital play on the gold mining industry.  The stocks involved are early-stage, high-risk firms with potentially high rewards.  The underlying Solactive Global Gold Explorers Total Return Index from Structured Solutions AG weights each component by free-float market capitalization.  The methodology caps individual stocks at 4.75% and also caps the cumulative weighting of less-liquid stocks at 10%.

Top holdings include Novagold Resources Inc (NG) 6.0%, Gabriel Resources Ltd (GBRRF.PK) 5.3%, European Goldfields Ltd (EGFDF.PK) 5.2%, Fronteer Gold Inc (FRG) 5.0%, and Rainy River Resources Ltd (RRFFF.PK) 4.9% (complete list of 30 holdings).

Country weightings are heavily skewed toward Canada and appear to include only English-speaking countries: Canada comes in at 84.9%, Australia 9.8%, United States 3.5%, and Hong Kong 1.8%.  (The last time I was in Hong Kong, English was the “official” language, but that was before 1999.)

GLDX has an expense ratio of 0.65%.  Additional information is located in the fund summary and fact sheet (pdf).

Image credit:  Gold Prospector by Tony Oliver

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.